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FERC's summer revival

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Essential Energy Insights - November 2021


FERC's summer revival

After half a year of waiting, the Federal Energy Regulatory Commission finally had its voting quorum restored, inspiring hope in the energy industry and fear among environmentalists.

The U.S. Senate on Aug. 3 voted to confirm Republicans Neil Chatterjee, energy adviser to Senate Majority Leader Mitch McConnell, R-Ky., and Robert Powelson, a member of the Pennsylvania Public Utility Commission and president of the National Association of Regulatory Utility Commissioners, as commissioners.

A week later, on Aug. 10, President Donald Trump named newly minted Commissioner Chatterjee as chairman, replacing acting Chairman Cheryl LaFleur, a Democrat. It was the same day that Powelson was sworn in as the third commissioner. Chatterjee said he would hold the chair until the arrival of another Trump pick, energy attorney Kevin McIntyre.

The White House on Aug. 2 said it had sent the nominations of Republican McIntyre and Democrat Richard Glick to the Senate, nearly three weeks after it announced its intent to nominate McIntyre as chairman and roughly five weeks after the White House said it had tapped Glick to serve on the commission. The U.S. energy industry and its supporters have pressed lawmakers to quickly confirm these picks. The Senate Energy and Natural Resources Committee has scheduled a confirmation hearing to consider the nominations for Sept. 7.

FERC, which has five commissioners when full, has been without the three-member minimum it needs to vote on major items of business since early February, when former Chairman Norman Bay resigned. Former Commissioner Colette Honorable left the agency at the end of her term on June 30, leaving just LaFleur.

The news of a restored FERC was greeted by a natural gas industry desperate for the commission to again advance pipelines and other infrastructure projects. About $14 billion in private capital for energy infrastructure projects has been held up by the lack of a quorum, the Interstate Natural Gas Association of America, or INGAA, estimated.

"We applaud the Senate," INGAA President Don Santa said. "The commission can now get back to work thoroughly reviewing the many energy infrastructure projects of national importance that have been sidelined in recent months."

"This is a win for workers across the energy supply chain, and every American that benefits from access to affordable energy," said Toby Mack, president and CEO of the Energy Equipment & Infrastructure Alliance.

The anxiety of the gas industry in the period before the new commissioners arrived could be heard in second-quarter earnings calls. Pipeline executives expressed frustration with a drought of federal permitting action. Many thought the quorum might not be restored until fall. Gas producers, including many in the Marcellus Shale, watched FERC to see when more takeaway capacity might arrive. They were also focused on the progress of pipelines going into the ground that had received FERC approval just before the agency lost quorum, such as Energy Transfer Partners LP's Rover pipeline project and TransCanada's XPress expansions.

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While the energy industry gave a warm welcome to FERC's return, environmental groups were unhappy that the commission is again able to approve gas infrastructure projects. The Natural Resources Defense Council viewed the news cautiously, with Director John Moore saying he hoped the commission will evolve to "the new reality of a more efficient, cleaner and affordable grid," specifically wind and solar energy.

The Sierra Club said it had problems with the new commissioners. "Based on their records, we remain concerned that Chatterjee and Powelson will continue FERC's status quo, approving unneeded fracked gas pipelines that take private land for corporate gain and lock Americans into higher electricity rates while increasing our dependency on fossil fuels for decades to come," Senior Director Lena Moffitt said.